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Friday, May 21, 2010

Yesterday, Tesla Motors and Toyota announced that Toyota will invest $50 million in Tesla, the two companies will partner on all-electric automobile technology, and that Tesla will take over the former NUMMI manufacturing plant in Fremont, California. NUMMI was a joint venture between Toyota and General Motors; GM pulled out last year when it went bankrupt, and Toyota, which was building Corollas and Tacoma trucks in the plant, shut it down last month, putting thousands of workers out of business.

Tesla had planned to build its own plant, originally in San Jose, and most recently in Downey, near Los Angeles, but the deal with Toyota will allow Tesla to retrofit an existing plant rather than build a plant from scratch. Tesla will employ far fewer workers than Toyota did; 1,000 when the plant is at full production for the Tesla Model S vs. 4,700 when Toyota shut the plant down. However, the jobs that do come back are auto industry jobs in the San Francisco Bay Area that would likely have been lost forever if this deal hadn't been worked out.